The five men and three women arrested included five Mexican nationals, an American and a Colombian.

The Mexicans and the American were charged with drug trafficking and appeared in court on Monday. They did not enter pleas or apply for bail and the case was adjourned until November 14, local broadcaster RTHK said.

News reports said the other two arrested were a Colombian woman and her Chinese husband, both Hong Kong residents.

Police said the warehouse was believed to be a drug packaging and storage centre. Police said the drugs were hidden in heaps of plastic engine oil or automotive transmission fluid containers for recycling, according to local newspapers.

"Traffickers have used different ways to disguise their dealings, but this is the first time police have seen recycled materials used," Narcotics Bureau Chief Superintendent John Paul Ribeiro said, according to the South China Morning Post.

Police said it may take more than 100 officers up to two more days to finish searching the 10,000-square foot (930-square metre) warehouse, the Hong Kong Standard reported.

Mr Ribeiro said the suspects had been in touch with local dealers but would not rule out the possibility that the drugs were destined for mainland China or other countries, the Post reported.

Drug trafficking carries a maximum penalty of life imprisonment and a fine of five million Hong Kong dollars (£406,000) in Hong Kong.